SIPCOT Water Infrastructure Charges Exempt From Service Tax Under Section 104: CESTAT Chennai

On 10 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the one-time amount collected by the State Industries Promotion Corporation of Tamil Nadu Ltd. (SIPCOT) from industrial allottees towards water supply infrastructure is exempt from Service Tax under Section 104 of the Finance Act, 1994. Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed SIPCOT's appeal and set aside the Service Tax demand, interest, and penalty imposed...

CESTAT Allows SPI Technologies' ₹2.47 Crore Refund On Export Services Despite CENVAT Reversal

On 8 June, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that refund of service tax paid on input services used for export of services cannot be denied merely because CENVAT credit was initially availed and later reversed, or due to procedural lapses such as delayed filing of declarations. Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. allowed the appeal filed by SPI Technologies India Pvt. Ltd., a Software Technology Park of India...

Construction of Educational Institutions Not Taxable Before 1 July 2012: CESTAT Chennai

On 8 June, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) held that works contract services used for construction of educational institutions were not liable to service tax during the relevant period prior to 1 July 2012, and dismissed the Revenue's appeal challenging the non-levy. Technical Member M. Ajit Kumar and Judicial Member Ajayan T.V. decided the appeal filed by the Department against R.R. Thulasi Builders (India) Pvt. Ltd. The Bench held: ...

CESTAT New Delhi Holds Goods Transport by Road Without Consignment Note Not Taxable GTA Service

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), on 5 June set aside a service tax demand against Best Road Carriers after holding that mere transportation of goods by road, without issuing a consignment note or providing ancillary services, does not amount to a taxable Goods Transport Agency (GTA) service. Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya held: “Since under GTA it is only such of these services which are in...

CESTAT Chennai Holds Remuneration Paid To Thriveni Earth Movers Directors Not Service Taxable

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently set aside service tax demands raised on remuneration paid by Thriveni Earth Movers Pvt. Ltd. to its whole-time directors. The tribunal held that such remuneration could not be subjected to service tax because the directors were working in an employer-employee relationship with the company. A coram of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed the company's appeals...

CESTAT Chennai Sets Aside ₹37.74 Lakh Service Tax Demand Against Apeejay Surendra Park Hotels

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has set aside a service tax demand of ₹37.74 lakh raised against Apeejay Surendra Park Hotels Ltd. It held that the hotel chain was entitled to avail CENVAT credit on specified common input services while also claiming the benefit of abatement under the applicable service tax notification. A Division Bench of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar allowed an appeal filed by the company. The...

Tea Estate Lease For Plantation Activities Cannot Be Split Into Multiple Taxable Services: CESTAT Chennai

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has held that a tea estate lease arrangement undertaken for plantation activities could not be artificially split and taxed under different service categories. The tribunal found that the arrangement constituted a composite agricultural transaction. A Division Bench of Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao allowed two appeals filed by NEPC Agro Foods Limited. The Bench set aside...

No Service Tax Under RCM On Railway Space Licence Fees For Ads: CESTAT Hyderabad

On 3 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax cannot be demanded under the reverse charge mechanism (RCM) from Prakash Arts Pvt. Ltd. for licence fees paid to Railways for use of space to display advertisements, as the arrangement amounted to renting of immovable property and not “support service”. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad dismissed the Revenue's appeal and upheld the...

Demurrage Paid To Foreign Vessel Owners Not Taxable As Port Service: CESTAT Hyderabad

On 3 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that demurrage charges paid by Rashtriya Ispat Nigam Ltd. (RINL) to foreign vessel owners for delays in loading or unloading cargo cannot attract service tax because such charges are contractual payments connected with transportation of goods and not consideration for any taxable service. Technical Member A.K. Jyotishi and Judicial Member Angad Prasad allowed RINL's appeals and set aside the...

Transfer Of Toll Collection Rights By NHAI Taxable As Service, Not Sovereign Function: CESTAT Hyderabad

On 2 June, the Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that consideration received by the National Highways Authority of India (NHAI) from contractors for transferring toll collection rights constitutes a taxable service and does not qualify as a sovereign function. Judicial Member Angad Prasad and Technical Member A.K. Jyotishi dismissed three appeals filed by NHAI challenging service tax demands, interest, and penalties arising from agreements...

CESTAT Chennai Holds Sub-Contractor Not An Independent GTA, Sets Aside ₹90 Lakh Service Tax Demand

On 2 June, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside a service tax demand of Rs.90.26 lakh against Vinoth Shipping Services, holding that a sub-contractor who only arranges transportation for a principal contractor cannot be treated as an independent Goods Transport Agency (GTA) liable to tax under the reverse charge mechanism. Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V. allowed the appeal and quashed the demand,...

Individual Villas In Gated Communities Not Residential Complexes For Service Tax: CESTAT Chennai

A gated community comprising individual villas on separate plots does not become a "residential complex" for service tax purposes merely because it has a common project identity and shared amenities, the Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held.A bench of Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar passed the ruling while allowing the appeal filed by Green Avenue Homes & Gardens and setting aside a service tax demand of...